Correlation Between Nuveen Core and Freedom Bank

Can any of the company-specific risk be diversified away by investing in both Nuveen Core and Freedom Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nuveen Core and Freedom Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nuveen Core Plus and Freedom Bank of, you can compare the effects of market volatilities on Nuveen Core and Freedom Bank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nuveen Core with a short position of Freedom Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Core and Freedom Bank.

Diversification Opportunities for Nuveen Core and Freedom Bank

0.42

Correlation Coefficient

Nuveen Core  Freedom Bank

Very weak diversification

The 3 months correlation between Nuveen and Freedom is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Core Plus and Freedom Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Bank and Nuveen Core is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nuveen Core Plus are associated (or correlated) with Freedom Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Bank has no effect on the direction of Nuveen Core i.e., Nuveen Core and Freedom Bank go up and down completely randomly.

Pair Corralation between Nuveen Core and Freedom Bank

Given the investment horizon of 90 days Nuveen Core Plus is expected to under-perform the Freedom Bank. But the stock apears to be less risky and, when comparing its historical volatility, Nuveen Core Plus is 1.96 times less risky than Freedom Bank. The stock trades about 0.0 of its potential returns per unit of risk. The Freedom Bank of is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,050  in Freedom Bank of on September 12, 2024 and sell it today you would earn a total of  51.00  from holding Freedom Bank of or generate 4.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Nuveen Core Plus  vs.  Freedom Bank of

Nuveen Core Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Core Plus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Nuveen Core is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Freedom Bank

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Freedom Bank of are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Freedom Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen Core and Freedom Bank

The main advantage of trading using opposite Nuveen Core and Freedom Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Core position performs unexpectedly, Freedom Bank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Freedom Bank will offset losses from the drop in Freedom Bank's long position.

The idea behind Nuveen Core Plus and Freedom Bank of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.